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Strategies & Market Trends : Ride the Tiger with CD
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To: robnhood who wrote (91397)9/12/2007 10:21:21 PM
From: tyc:>   of 313135
 
From your posting on a different thread:

>>"In the second scenario the USD crashes as the Argentine Peso did a few years back and US consumption will collapse as domestic prices explode. In both scenarios the folks who were advocating holding 'cash' and bonds will get killed and won't benefit from the actual deflation that comes when a fiat currency and debt denominated in that fiat currency move sharply towards intrinsic value".

EOQ

That's a pessimistic possibility, robn.... a worst case scenario. If it materialises, I wonder if the following quote that was written with emerging markets in mind is relevant. It's my optimistic view that it would indeed apply. (this quotation from "Beyond Wall Street"):

"Fortunately for investors (in emerging markets), investing in stock can offset routine fluctuations in the currency - provided the investors don't panic and pull the plug. "We are not concerned about currency, because an investment in equity is a hedge on the currency".

"Like Argentina"

The paragraph continues: "...... We were investing in Argentina in late 1987 and early 1988, and of course a lot of people said 'Aren't you worried about the currency?' we said no because by buying assets we're protecting ourselves - just like the local investors are protecting themselves.

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